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Interestingly, both Vistara CEO Phee Teik Yeoh and his Air Asia India counterpart Amar Abrol were present at the event. Raju told reporters that airlines would no longer need to wait for five years before starting international operations and added that domestic carriers would not be requi

Interestingly, both Vistara CEO Phee Teik Yeoh and his Air Asia India counterpart Amar Abrol were present at the event.

Raju told reporters that airlines would no longer need to wait for five years before starting international operations and added that domestic carriers would not be required to seek approval before entering into international code share agreements.

On scrapping of 5/20 rule, he said when an airline has operational capability it should be allowed to fly overseas instead of asking it unnecessarily and artificially to wait for five years.

"I expect them (all airlines) to be on board because none of their competitors outside the Federation of Indian Airlines (FIA) has 20 aircraft. So I dont see any reason why they should immediately run to court unless they wish to unnecessarily waste their money," Choubey said.

"The centrepiece of the policy is the BJP manifestos promise of regional connectivity," the minister said.

Choubey said the ministry has been interacting with state governments on Regional Connectivity Scheme (RCS) and that they have been supportive of it.

The Rs 2,500 cap for one-hour flights would be all- inclusive, he added.

As per the policy, Viability Gap Funding (VGF) would be provided to airline operators as part of RCS. "RCS only in those states which reduce VAT (Value Added Tax) on ATF (Aviation Turbine Fuel) to 1 per cent or less, provide other support services and 20 per cent of VGF," the Ministry said.

When asked about the proposal in the draft policy on increasing FDI limit from 49 per cent for airlines, Choubey noted that the draft only said the matter would be examined.

"Now when we are not giving any commitment, it need not be a part of the policy because examination of the FDI limit can be done any time. So, the idea behind the policy is to make firm commitments and not merely make statement," he said.

Under the policy, the government would also come out with separate regulations for helicopters, develop four heli-hubs and facilitate helicopter emergency medical services.

About the incentives for Maintenance, Repair and Overhaul (MRO) segment in the policy, Raju said those are aimed at developing India as a MRO hub for South Asia.

As per the policy, local carriers would be permitted self ground-handling at all airports to ensure competition and efficiency.

Indias domestic passenger traffic increased 22 per cent in the last fiscal to more than 80 million.

The government aims to increase this number to 300 million in the next five years, Choubey said.

For Air India, there is already a financial restructuring plan that has been approved by the Cabinet in 2012, he said, adding, "So there is no need for a separate policy pronouncement on Air India." PTI IAS RAM ZMN

This is unedited, unformatted feed from the Press Trust of India wire.

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